Pay: The legal minimum wage in Gungdong Province is $1.93 (15Rmb) per hour, The legal minimum for overtime pay is $0.36 (3Rmb) an hour. However, workers in these factories are given $0.96-$1.45 (8-12 Rmb) per hour; workers make $0.19-$0.33 (1.5-2.5Rmb) per hour of overtime, both of these rates are below the legal pay.
Living: most of these factories provide food and housing, but workers must pay for them. There are generally 6-10 people living in a room and they share only one bath. Air condition is poor and has caused many dizzies.
Safety: The working conditions at the factory are often very dangerous to the health of the workers. Workers inhale excessive dust in workplace; there is noise pollution and congestion in the factory. Because of the lack of the protective equipment, there have been a variety of accidents frequently happening at these factories. Workers loose their hands and fingers in the machines, fainting due to heat and fumes. Many of them suffer from dizziness, skin irritations, and headaches. Shoe making involves dangerous chemicals and operations. Benzene glue which is a recognized toxic chemical and is banned in the United States is widely used in these factories in China. The factories also use large quantities of thinners, which can cause blood cancer from exposure. Programmes such as Child care, social security benefits, and medical insurance do not exit at all.
Union: Lack of free trade unions is a national political problem in China. Although workers are allowed to make complaints to supervisors, most workers have never made complaints themselves because they are afraid of the consequences. Factories either have no union or the government-controlled trade union, as independent unions are not allowed. Financial incomes for these are provided by the company itself according to law. When a union branch did exist at a factory, it did so little for the workers that many were unaware of its presence. Although, there have been many strikes at these factories in the past. Usually, the workers strike because the factory did not pay them, other reasons for striking included long working hours and poor quality of food, low pay, poor living conditions, and quotas which were too high. Most of the time, the result was all the workers who went on strike were fired.
Besides the realities in these big factories, we should be aware of the sub-contracting system used by producers in China. Many big factories sub-contract part of their business to small partners on a regular or irregular basis, often to small town and village enterprises. The working conditions in China are notoriously worse there than in these big factories.
Before the arrival of these multinational sport shoe companies in China, the shoe industry was based on state-owned enterprises producing for the domestic market. However, since the 'opening up' of the economy and the economic transition to planned economy, government started to privatize spots-shoe industry. Meanwhile, the costs of production began to rise in the United States and Europe, and workers organized and were growing in bargaining power, then sports shoe companies had to relocate their factories or sought subcontractors in Asia where wages were much lower and where systematic repression of labour movements promised a more complied workforce. Companies like Nike and Reebok began to subcontract to medium and small-scale companies in China. Abundant labour, low production costs, the lack of enforcement of labour laws and standards, repression of independent union organizing and government’s incentives to foreign investors have made China very attractive for export manufacturing. And these sports shoe giants have been enjoying huge profits by exploiting the huge gap between production costs (particularly labour costs) and the high production prices at which those shoes are sold in market. Meanwhile, working conditions in sports shoe making factories are getting worse then it was before. This is especially true that the number of hours that workers are forced to work has actually increased in the past few years.
However, Poor conditions in the factory are not simply the result of having a particularly harsh factory owner. Generally, companies like Nike and Reebok do not deal with production,they distance themselves through subcontracting, benefiting from low production costs without any direct responsibilitie. Subcontracting allows them to respond quickly to changing styles and fashions, while passing all of the uncertainty and insecurity to their subcontractors and ultimately to the workers themselves. With little or no notice, the multinationals can change the order and demand a different style of shoe, forcing the subcontractor to make rapid changes in their production set-up. Since everything must be done very quickly; the workers have to work harder and faster, and to work overtime if they want to keep their jobs. And it is actually the multinationals, not the subcontractors that ultimately set the pace of production as well as the wages of the workers. If a subcontractor wants to stay in business, he must accept the timeline set by the multinational and accept the price the multinational is willing to pay per shoe. And when the multinationals screw the subcontractors, the subcontractors screw the workers.
These problems are not new, nor are they particular to China, they are occurring throughout south-east Asia. Thus, some of the companies involved - particularly Nike and Reebok - have been publicly challenged by this fact. Most workers are unclear about safety regulations in their workplace and whether or not the factory abides by the standards set by law. This lack of education about health and safety issues implies that many workers are unaware of the risks of these hazardous factory conditions. However, is this excuse for companies not to take care of the workers working for them? In developing countries, cheap labour has been the result of the lack of legislation for the rights of workers and poor execution of labour laws, but should TNCs take advantage of this? The sport shoe giants defend their actions with excuses such as ‘it is not our bushiness’ or ‘the wage is small, but it is better than having no job’, and to an extent, are confident that they are socially considerate. Sweatshops can inadvertently improve the economy of the country in which it is located, to the point of reducing unemployment in the lower classes. To some degree, these sports shoe companies would take care to ensure that the community's economy is always dependent on their sweatshop for survival. Because they pay workers low wages, workers will not have enough savings to start a business of their own or to invest in the local economy. Because of the few benefits that Nike provides the community with (such as employment), local governments in China are under the illusion that there is no need to change the status quo. If necessary, these sweatshops will set up extremely inadequate and low-cost services so that the government does not have to. They intend to maintain the poverty level of local community to avoid having to relocate their factories to other regions.
So what should the sweatshops do? All of them would have a clear idea of what they should do as stipulated in these codes. I am not saying that these companies should pay US wages to its Asian workers, but pay enough to maintain an average standard of living for the country in which they live. This is obviously significantly below the US wage, but it is also usually above the minimum wage set by local governments. Companies such as Nike have sufficient profits to pay workers wages that allow them to meet the basic needs of their families for food, housing, transportation, clothing and health care, and to accumulate savings. It is also their obligation to examine whether laws regarding minimum wage and overtime pay were being respected, as stated in these codes. Ethically speaking, it is also a fundamental obligation for corporations to consider the safety and well beings of their employee. Any forced overtime should be eliminated, and workers should receive the legal overtime pay rate. They should be provided with benefits such as medical insurance. Furthermore, they should provide programs to employees to ensure that they have a good understanding of about the codes and their rights (but this is not realistic!!) And they should also set up compensation fund for workers who are injured. More importantly, they should pressure the governments to take action and make improvement regarding on issues such as labour law enforcement, and workers’ rights. “As leading international corporations, U.S. sports shoe companies would play a positive role in improving human rights in China. They would become an example for others to follow”. This is what President Bill Clinton promised when he de-linked the granting of the Most Favored Nation status from human rights in China. Mr. Clinton insisted that “US capital would have a positive effect on the development of human rights in China”, but we have yet to see these positive results. We hope that these sports shoe giants will seriously consider these problems; I am looking forward to see changes that will allow the hard-working people who make their shoes to live with the respect they should deserve.
There are also lots of things that we can do as individuals to help improve the working conditions of these workers. Basically, we can buy things with the No Sweat Shop label in preference to other clothes. Some may argue that this would result in the loss of jobs for these workers. However, the No Sweat Shop label should not mean the loss of jobs, but rather the elimination of exploitation. You can also check the who have signed the “ If your favorite brands do not have clothes with the No Sweat Shop label, you should ask them why and encourage them to ask their suppliers to get involved in no-sweatshop event. At least these stores have to take into account their customers’ suggestions. And this will be practical as long as enough of us participate. If you want to get more involved, you can help publicize the No Sweat Shop label which is the only real assurance that clothes were made free from exploitation, and you can organize protest against these companies.
Finally, the Chinese government is also much more responsible for the problem. Sadly, as a developing country, there is trade-off between developing economy and improving working condition of workers, although these two should not have any inverse relationships under normal circumstances. Personally I have seen how fast China is changing, and the living standard for some people has been improved tremendously, on the other hand, the living condition for others is getting worse due to exploitations mentioned above. However, do not interpret this the wrong way. I love my country and I do not blame the government for I believe that the government only wants what is best for the citizens and for the nation. It would be too idealistic to think that a single paper can come up with solutions that have eluded government officials at the national level. However, there are some suggestions that I came up with, and there is a very good example – the rise of Japanese economy. I think that while attracting foreign capitals into the country, the Chinese business sector should also consider how to generate capital in their own country. Government emphasis in technology and education is one of the methods that could be employed to increase productivity of the labour pool and thus avoid exploitation. Technology advances (with little confidence to relate this topic to technology, since I am truly aware of that the technology expressed in different terms in real life somehow have caused fundamental social problems) also allow the country to produce their own products which attract foreign buyers, as in the case of Japanese Automobile industry.